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December 2024

Unit: Company law

21 Questions

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Questions

1a
Nature and classification of companies
​​Outline FOUR characteristics that define the legal framework within which companies operate in Kenya.
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1b
Nature and classification of companies
​​Explain TWO differences between a “holding company” and a “subsidiary company”.
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1c
Formation of companies
​​A Memorandum of Association was judicially defined by Lord Cairns in Ashbury Railway Carriage Co Ltd vs. Riche as "the charter" which defines the limitation of the powers of a company to be established under the Act. 

 With reference to the above statement, analyse FOUR rules concerning the legal effect of the memorandum of association of a company.
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1d
Corporate restructuring
​​Describe the process of converting a private company to a public company.
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2a
Membership of a company
​​It is a requirement by law that every company should keep a register of its members. Identify FIVE content of this register.
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2b
Membership of a company
​​Explain FIVE ways that a person can cease to be a member of a company in your country.
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2c
Shares
​​Your friend Wilfred Mbecheh wishes to buy shares in an investment company. He has no idea what shares are and he has come to you for advice. 

 Advise him on the following: 

 (i) TWO classes of shares. 

(ii) THREE rights attached to shares. 

(iii) FIVE characteristics of shares.
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3a
Debt capital
​​Identify FIVE company assets that can be used to secure a company’s borrowings.
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3b
Debt capital
​ ​​(i) Explain the meaning of the term “ultra vires borrowing”. 

(ii) Discuss THREE equitable remedies available to a lender of money “ultra vires” to the company.
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3c
Share capital
​​Describe FOUR types of share capital.
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4a
Company meetings
​​In relation to company meetings: 

 (i) Outline FOUR specific essentials and considerations for conducting a hybrid company meeting. 

(ii) Describe THREE types of company meetings.
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4b
Formation of companies
​​Examine FIVE exceptions to the doctrine of indoor management.
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5a
Company accounts
​​In relation to company accounts: 

(i) Identify FOUR exemptions provided for small companies regarding the form and preparation of accounts. 

(ii) Describe FOUR disclosures that are necessary in group accounts.
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5b
The Company Secretary
​​Discuss FOUR defenses that a company secretary can rely on to avoid liability.
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5c
Auditors
​​Auditors may face civil liability when their clients or third parties suffer financial losses. 

 With reference to the above statement, examine FOUR circumstances where civil liability can arise.
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6a
Corporate restructuring
​​In relation to corporate restructuring, explain the following concepts:

(i) Legal restructuring.

(ii) Organisational restructuring.

(iii) Operational restructuring.

(iv) Financial restructuring.

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6b
Audit of Company Accounts
​​In relation to financial audit of company accounts, explain THREE types of auditor’s opinion.
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6c
Company Investigation
​​Discuss SIX powers of an inspector appointed to investigate affairs of a company.
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7a
Receivership, Administration, Liquidation and Dissolution of companies
​​In relation to company liquidation: 

 (i) Explain the term “compulsory liquidation”. 

ii) List FIVE parties who can petition for a compulsory liquidation.
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7b
Foreign Companies
​​It is provided by law that companies incorporated outside Kenya should provide certain documents and information within 30 days of establishment of the business. 

 Explain FIVE documents and relevant information required by the registrar of companies to register such companies.
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7c
Receivership, Administration, Liquidation and Dissolution of companies
​​Explain FOUR objectives of placing a company under administration.
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